On July 1, 2019, Kay Company sold equipment to Mando Company for P 1,000,000. Kay accepted a 10% note receivable for the entire sales price.This note is payable in two equal installments of P 500,000 plus accrued interest on December 31, 2019 and December 31, 2020.On July 1, 2020, the entity discounted the note at a bank at an interest rate of 12%.What is the amount received from the discounting of note receivable? a. 484,000 b. 493,500 c. 503,500 d. 517,000
On July 1, 2019, Kay Company sold equipment to Mando Company for P 1,000,000. Kay accepted a 10% note receivable for the entire sales price.This note is payable in two equal installments of P 500,000 plus accrued interest on December 31, 2019 and December 31, 2020.On July 1, 2020, the entity discounted the note at a bank at an interest rate of 12%.What is the amount received from the discounting of note receivable? a. 484,000 b. 493,500 c. 503,500 d. 517,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....
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On July 1, 2019, Kay Company sold equipment to Mando Company for P 1,000,000. Kay accepted a 10% note receivable for the entire sales price.This note is payable in two equal installments of P 500,000 plus accrued interest on December 31, 2019 and December 31, 2020.On July 1, 2020, the entity discounted the note at a bank at an interest rate of 12%.What is the amount received from the discounting of note receivable?
a. 484,000
b. 493,500
c. 503,500
d. 517,000
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